If I was a Red Hat shareholder I wouldn't ever expect
them to report profits or earning in line with their
market cap. It's a speculative holding, bought by people
who believe that its "buzz" will keep other investors
interested. That's basically like Yahoo! and other
high flying Internet stocks.

It appears to me that the stock market's absurd gains
in the last decade amount to a simple fact of the
current prosperity and concentration of wealth in
our economy: "There's no where else to stash it."

It is generally accepted that putting money into banks
for a paltry 3% to 5% return is a way to slowly LOSE
your money due to inflation and taxation. Other
forms of investment such as real estate and the bond
market are driven more by inflation. When we have low
inflation those investments won't "perform" well.

Meanwhile the poor are getting poorer, the middle
class are working hard and spending more, and the rich
are getting richer. The hard working middle class
have put money (or had it deducted) into pension plans.

So we have billions of dollars (the holdings of the
pension plans, and those of the rich individuals and
corporations) which have to "go somewhere." There's
incredible social and economic pressure for that money
to be "working."

Since the U.S. economy is the strongest in the world
and the North American continent is one of the
most politically stable there is little incentive to
invest overseas. So most of the money will stay
on our stock markets.

(This is not to say that we are the "good guys." From what
I've read of Chomsky, Uncle Sam stirs up much of this
international trouble. We later don our white hat and make a
great show of our heroic efforts to make peace. To read
more on that topic visit the "The Noam Chomsky Archive"
http://www.lbbs.org/chomsky/index.cfm and consider getting
and reading a copy of "Deterring Democracy" in particular).

As for Red Hat I don't know that PhatLinux is such a
critical aquisition for them. There have been several
"FAT Linux" distributions (running under a subdirectory
on an MS-DOS/MS Windows filesystem) over the years.
There is a Macmillan product known as something like:
"Linux for Windows" (which might be a re-packaging
of PhatLinux for all I know). You can find info about
it at http://www.macmillansoftware.com/mac_software
if you're willing to put up with the JavaScript that they
force all over their page. It's basically unusable in
Lynx and I don't feel inclined to fire up X to look
at it (since I'm writing this through an ssh link
about three U.S. states from my home mailbox).

So, Red Hat could create a "no-repartition" Linux
product. They could buy a company that's done it
(build or buy --- it's the recurring question for every
business' software strategy).

I have no experience with PhatLinux
(http://www.phatlinux.com) so I can't offer an opinion on
the technical merits for this suggestion. They (Red Hat)
would presumably want their own analysts to make that
decision.

I've never used either of these products personally.
Most of my associates at Linuxcare
(www.Linuxcare.com)
use VMWare when they need to access "legacy" MS Windows apps
(and even when they want to run a copy of Linux under a virtual
machine).

Again, I can't speak to the technical merits of such an
aquisition.

There's also Kevin Lawton's Freemware
(http://www.freemware.org) is an open source project to
implement something like Win4Lin and VMWare. Kevin Lawton
wrote the Bochs package which is a shareware virtual machine
(that implements an x86 on any UNIX platform).

Meanwhile let's not forget the WINE project
http://www.winehq.com which is continuing to plug away at
running MS Windows programs under Linux (in this case
without need for an emulator or hardware virtualization
layer).

Lothar (http://www.linux-mandrake.com/lothar) is a project
that is being spear-headed by MandrakeSoft, a competitor to
Red Hat. In addition it basically overlaps some of the
functionality that Red Hat hopes to implement in Linuxconf
(a package in which they've already invested some effort and
support). However, Lothar does seem to be an open source
project --- so any contribution by Red Hat could benefit
them (and everyone ele). It looks like Lothar is focused
primarily on the administration and configuration of
hardware. Basically let's provide a good UI for "adding
hardware" (one that's better and more robust than Win '9x's
infamous "Adding Hardware" wizard).

Your last suggestion makes more sense than any of the
others. Of course one should be careful with "focus goups."
If the methods used in selecting participants and conducting
the research aren't exceptionally good, then you just end
up drawing conclusion from the exercise that match
assumptions that you fed into it.

All of your suggestions do have a consistent theme. They
all relate to the growth of Linux on the PC desktop.

It seems that Red Hat doesn't consider that to be a
strategic priority. I can understand their point of
view there. They are trying to "break into" lucrative
niches "where the money is." That is suggested by
their aquisition of Cygnus.

Linux on the desktop will probably happen. Red Hat will
probably help. However, the migration away from MS Windows
on home and client systems will be primarily driven by users
and free programmers (including Red Hat developers in their
"free" time).

Meanwhile, Red Hat has "bigger fish to fry" (or so they
hope).

As to which breeds of fish they're cooking, I wouldn't
know. Unfortunately for them Red Hat seems to lack focus.
They claim to want to build up their services --- yet they
still lack credibility in their support and professional
services offerings.

Their bread and butter has been shrink wrap --- and they are
getting nailed by Macmillan's Mandrake based packages (which
have a well-established retail channel through their ties to
book stores).

Their purchase of Cygnus would suggest a diversification
into tool chain and embedded systems (the strengths of
that company).

Their announced strategic relationships with Oracle et al
suggest a focus on the IT server room --- the old NT killer.

I personally see these as different directions. None of
them point to Joe consumer and the desktop.

Their support of GNOME can be
seen as a desktop oriented
initiative. However, it seems that the public, even the
IT purchasing public suffers from the delusion that servers
need GUIs. So I'm not sure that this is a compelling argument.

Anyway I think that Red Hat does hope to "cash in on" the
name recognition that they've built. They don't seem to
think that retail sales of their distribution will sustain
reasonable growth for them. They're right!

The Linux market is overly "distribution"-manic. There is
relatively little difference among distributions. Red Hat,
S.u.S.E.,
Caldera,
TurboLinux,
Debian, Corel and
Stormix are
all fundamentally the same software.

[ With different installers, each having their own idea of glitz.
Actually, the packaging system
is a slight delimiter -- .rpm vs .deb -- but with the help of
a small package called alien, even that can generally
be overcome quickly.
-- Heather ]

With an effective LSB (*) we wouldn't even have to ask
"what distribution is that for/from?" You could simply
install, configure and manage any package from the open
source world without worrying about the details.

I think Red Hat realizes the truth in this and is frantically
seeking other revenue streams. The sad think is that the
shrink-wrapped/packaging business is not such a bad one
to be in. It did, after all, get them where they are today.